Pieter Uys speaks out about lower interconnect rates

rpm said:
Vodacom CEO says that the biggest operating cost for a mobile call is transmission lines purchased from Telkom
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Sorry, I cannot accept that is the reason for high inter-connect costs
That applies to ALL calls and is not a factor in the interconnect cost.
But are they not building their own fibre network to circumvent the Telkom lines?

I know some MTN technical staff who are supplied company (MTN) cell phones for business use. All calls within the MTN network as well as all business related calls are free. Personal calls across networks are charged at cost to the employee and I was quoted a figure of 20 (or possibly 25) cents per call. I was told that was the base cost of providing the interconnection between networks. (info is 2-3 years old)
 
Thirdly, ICASA would have to apply their minds in such a manner that they do not financially damage any operator by their ruling
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i think icasa has spent many years taking that advise, and someone has finally realised that that possibility doesnt exist.

since this would simply reduce the extent of competition in the industry and discourage investment in telecommunications infrastructure
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high barriers to entry put up by yourselves and mtn reduced the extent of competition, hence cellc's and virgin's complaints over the years. a friendly duopoly system doesnt qualify as competition.

generally benefits the poor and marginalized as borne out by the 110% mobile telephony penetration level achieved since the advent of mobile 15 years ago.
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oh, come on mr vc. judging by both of you's sprawling corporate parks and recent financials, i would think it benefits more yourselves and mtn than the poor. in fact, the poor have been disadvantaged by your super-profiteering.
 
He sure used a lot of works to say nothing. How many years has it been since the mobile networks got the right to self provide. Must be four years by now. Seacom designed and laid a cable under several km of water, crossing territorial waters of several African countries while avoiding pirates (the dangerous kind) in less time. Vodacom, your days of raping the consumer are OVER, no amount of marketing BS spouted by the CEO is going to change that.
 
djrwb said:
Sorry, I cannot accept that is the reason for high inter-connect costs
That applies to ALL calls and is not a factor in the interconnect cost.
But are they not building their own fibre network to circumvent the Telkom lines?

I know some MTN technical staff who are supplied company (MTN) cell phones for business use. All calls within the MTN network as well as all business related calls are free. Personal calls across networks are charged at cost to the employee and I was quoted a figure of 20 (or possibly 25) cents per call. I was told that was the base cost of providing the interconnection between networks. (info is 2-3 years old)
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So, if networks can make nation wide calls without leaving there network then all they need to do is build their own links to the other networks? Considering both Vodacom and MTN have massive networks, I fail to see how this is a problem.

Furthermore the interconnect rate from a Telkom line to the cell networks (and vice versa) is also fairly high - since this technically not bridging the Telkom network I would like an explanation of how this occurs.

It's complete hogswash with networks trying to cover their own asses and continue their financial reign of terror.

You know when a company is ripping you off? When they can afford massive sports sponsorships, buying teams and buying stadia. First it was tobacco, but that was okay because it's technically a "sin"; then there was alcohol, another "sin"; now it's the cell phone companies ripping us a new one for a necessary service that we can't, unlike the first two, do without!
 
ike said:
i think icasa has spent many years taking that advise, and someone has finally realised that that possibility doesnt exist.



high barriers to entry put up by yourselves and mtn reduced the extent of competition, hence cellc's and virgin's complaints over the years. a friendly duopoly system doesnt qualify as competition.



oh, come on mr vc. judging by both of you's sprawling corporate parks and recent financials, i would think it benefits more yourselves and mtn than the poor. in fact, the poor have been disadvantaged by your super-profiteering.
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And stadia, and soccer teams, and rugby teams, and soccer tournaments, and rugby tournaments, etc, etc.
 
Let me clearly say that Vodacom is not opposed to the reduction of interconnection rates.
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Good - then reduce them now. No need to wait months even years.
 
djrwb said:
Sorry, I cannot accept that is the reason for high inter-connect costs
That applies to ALL calls and is not a factor in the interconnect cost.
But are they not building their own fibre network to circumvent the Telkom lines?

I know some MTN technical staff who are supplied company (MTN) cell phones for business use. All calls within the MTN network as well as all business related calls are free. Personal calls across networks are charged at cost to the employee and I was quoted a figure of 20 (or possibly 25) cents per call. I was told that was the base cost of providing the interconnection between networks. (info is 2-3 years old)
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It is correct that if you work at mtn and have a company provided cellular phone,
All your calls within the mtn network are FREE, calls to other networks
Are heavily subsidized, not sure of the exact amount.
 
lies

so they want us to believe that with X BILLION Rand per year they couldnt think ahead and create their own infrastructure? in the long run would that not have been to their own benefit seeing as Telkom over charges once again.

Give us all a break and stop trying to blame the competition for your own short comings.

R9 Billion from interconnect rates and yet they still expect the people to believe their soppy Telkom story.

Yes! Telkom is over priced on everything... but take it like a man in the spotlight... dont try to hide away and set all eyes on Telkom. Someone in this country has to start taking responsibility!

Vodacom and MTN you had plenty of time to build your business and create your infrastucture! This is all YOUR short comings and not that of Telkom.

im going to say it over and over till it sinks in R9 Billion, R9 Billion, R9 Billion....

If that amount of money cant bring on change.. then nothing can!
 
VC statement is just PR excercise that was carefully worded by their legal dept. Initial cell phone costs in SA were based on a few hundred thousand users and years to recoup investments. But we all know how true that is with millions of users.

He gives the impressoon that VC could have dropped termination rates but if other networkd did not drop call costs then VC woukd loose business.That is BS and they know it.

How does tlkm, neotel provide cheaper cell calls with same term. rates! So what if Icasa ruling causes VC to go belly up and cellc becomes next VC! with consumers getting cheaper call rates!

From his speach it sounds like they already have Icasa in their pocket....
What i dont understand is why comp. comm. cant investigate vc &mtn for anticomp behaviour?

MyBB should cordinate public response from this forum.
 
A pointless statement by the Vodacom CEO in which nothing of interest is revealed. The 'demonstrable cost' as he puts it should be in the region of about 25c. His 3rd point is obvious and ICASA have already stated there would be a gradual reduction in rates. I also don't think 'generally expressed opinions' have indicated anything other than that this is applied to off-net calls. And what does this have to do with Telkom - haven't we been concentrating on cell-cell calls? One thing at a time - we'll get to Telkom soon enough.
 
Most cell calls are routed via Telkom's network.

Cellular Handset > Tower > Telkom cable > Telkom exchange > Telkom cable > Tower > Cellular Handset.

EDIT: This is very simplified and leaves out the Cell Operators BSC's, etc.
 
Smoke & mirrors.
The problem is transparency, always has been, but be sure Telkom will feature in the final costing formula prominantly!
 
Some questions :

How much profit was made last year ?
Are they saying when the interconnect rate was 25c per minute they were making a loss? not a chance.

Lets get real here Vodacom, we the consumer demand cheaper rates, if you can't give it then get out..

A fact, in Uganda an international call is cheaper on prepaid there, than what we pay for a local domestic call on the same network.
 
Contrary to generally expressed opinions, the mobile terminating rate only affects the price of off-net calls, i.e. calls between Vodacom, MTN, Cell C and Telkom. Mobile terminating rates do not form a cost element in on-net calls, i.e. a Vodacom to Vodacom call.
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.

Though Telkom still has to supply the backhaul transmission for on-net calls too.
If I make a call from CT to JHB, on-net, it still has to be carried over Telkom supplied backhaul links.

So based on the above quote.
I'm left to assume the rate is then only what is negotiated between mobile operators.
This was evident when CellC came along and MTN and VC hiked the rates.
The interconnect rates is a farce that has been created by the duopoly!

There is no need for it to be that high.
Based on the volume of calls made on all networks, it's the easiest cash cow they have and this was proved in an earlier article that showed how much they were making from interconnect rates alone.

The biggest single operating cost component for every mobile call is the cost of transmission lines which mobile operators have been obliged to hire from Telkom over the past years. This cost must also be taken into account when interconnect rates with Telkom are renegotiated.
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How much of a negotiation can there really be about this kind of thing?

VC easily knows what the cost of supplied links are for Telkom.
I can't imagine you're sending a bunch of dimwits around to go and negotiate this kind of thing.
As VC is in the same game - it's really easy to tell Telkom to STFU!
You know what the costs involved are and certainly there has to be enough negotiating power to get the cost inline with what you'd expect.

As a heavy source of revenue, VC (and MTN) should and would have the negotiating strength in this regard.

Is Telkom really not going to bend to the will of it's two largest cash cows? (That does not take into consideration the biggest cash cow - us.)
 
at the expense of the poor and marginalized communities...

Contrary to generally expressed opinions, the mobile terminating rate only affects the price of off-net calls..
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I love how reducing prices will affect poor communities.. cheap attainable arv's badly affect the quality of life of aids sufferers too hey?

Duh on the pricing.. so why the hell is he bringing up cost of transmission links? last time i check this is factored into the cost of on-net calls and makes squat difference to off-net besides the trunk/connection to another network <-- this connection is overpriced with the current scheme
 
Shake&Bake said:
Is Telkom really not going to bend to the will of it's two largest cash cows? (That does not take into consideration the biggest cash cow - us.)
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In a handful years Vodacom + Mtn will be singing another tune, i can promise you that. Telkom as a mobile provider years after these two have taken the market is a scary prospect.. not so much from a consumer point of view(which will happen) but from big businesses consolidating their telecoms needs
 
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